Loading...
HomeMy WebLinkAboutCC 2011-05-26 MinutesCity of Miami City Hall 3500 Pan American Drive Miami, FL 33133 www.miamigov.com Meeting Minutes Thursday, May 26, 2011 9:00 AM SUPPLEMENTAL City Hall Commission Chambers City Commission Tomas Regalado, Mayor Wifredo (Willy) Gort, Chairman Frank Carollo, Vice -Chairman Marc David Sarnoff, Commissioner District Two Francis Suarez, Commissioner District Four Richard P. Dunn II, Commissioner District Five Tony E. Crapp Jr., City Manager Julie O. Bru, City Attorney Priscilla A. Thompson, City Clerk City Commission Meeting Minutes May 26, 2011 INVOCATION AND PLEDGE Present: Chairman Gort, Commissioner Sarnoff, Vice Chairman Carollo, Commissioner Suarez and Commissioner Dunn II On the 26th day of May 2011, the City Commission of the City ofMiami, Florida, met at its regular meeting place in City Hall, 3500 Pan American Drive, Miami, Florida, in regular session. The meeting was called to order by Chair Gort at 9:25 a.m., recessed at 11:13 a.m., reconvened at 2:20 p.m., and adjourned at 4: 59 p.m. Note for the record: Vice Chair Carollo entered the chambers at 9: 29 a.m. SI.1 RESOLUTION 11-00441 Department of A RESOLUTION OF THE MIAMI CITY COMMISSION, WITH ATTACHMENT(S), Finance AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $140,000,000 IN AGGREGATE PRINCIPAL AMOUNT OF SPECIAL OBLIGATION NON -AD VALOREM REVENUE REFUNDING BONDS IN ONE OR MORE SERIES, FROM TIME TO TIME, FOR THE PURPOSE OF, TOGETHER WITH OTHER AVAILABLE MONEYS, REFUNDING THE CITY'S OUTSTANDING $50,000,000 AGGREGATE PRINCIPAL AMOUNT OF REVENUE NOTE, SERIES 2010 (PORT OF MIAMI TUNNEL AND ACCESS IMPROVEMENT PROJECT) (THE "NOTE") AND REFINANCING CERTAIN OUTSTANDING LOANS FROM THE SUNSHINE STATE GOVERNMENTAL FINANCING COMMISSION; PROVIDING FOR THE RIGHTS AND SECURITY OF ALL HOLDERS OF BONDS ISSUED PURSUANT TO THIS RESOLUTION; PROVIDING CERTAIN DETAILS OF THE BONDS; DELEGATING OTHER DETAILS AND MATTERS IN CONNECTION WITH THE ISSUANCE OF THE BONDS TO THE CITY MANAGER, WITHIN THE LIMITATIONS AND RESTRICTIONS STATED HEREIN; PROVIDING FOR THE PAYMENT OF SUCH BONDS FROM LEGALLY AVAILABLE NON -AD VALOREM REVENUES BUDGETED AND APPROPRIATED BY THE CITY FOR SUCH PURPOSE; APPOINTING A BOND REGISTRAR; AUTHORIZING A BOOK -ENTRY REGISTRATION SYSTEM FOR THE BONDS; AUTHORIZING THE NEGOTIATED SALE AND AWARD FROM TIME TO TIME BY THE CITY MANAGER OF THE BONDS TO THE UNDERWRITERS, WITHIN THE LIMITATIONS AND RESTRICTIONS STATED HEREIN; APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE BOND PURCHASE AGREEMENTS; APPROVING THE FORM OF AND DISTRIBUTION OF ONE OR MORE PRELIMINARY OFFICIAL STATEMENTS AND OFFICIAL STATEMENTS AND AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE OFFICIAL STATEMENTS; COVENANTING TO PROVIDE CONTINUING DISCLOSURE IN CONNECTION WITH THE BONDS IN ACCORDANCE WITH SECURITIES AND EXCHANGE COMMISSION RULE 15C2-12 AND AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE DISCLOSURE DISSEMINATION AGENT AGREEMENTS WITH RESPECT THERETO AND APPOINTING A DISCLOSURE DISSEMINATION AGENT THEREUNDER; CREATING CERTAIN FUNDS AND ACCOUNTS AND PROVIDING FOR THE APPLICATION OF THE PROCEEDS OF THE BONDS; DELEGATING TO THE CITY MANAGER AUTHORITY TO NEGOTIATE AND OBTAIN ONE OR MORE City ofMiami Page 2 Printed on 6/16/2011 City Commission Meeting Minutes May 26, 2011 BOND INSURANCE POLICIES AND/OR A RESERVE ACCOUNT INSURANCE POLICIES FOR DEPOSIT TO THE CREDIT OF THE SUBACCOUNT OF THE DEBT SERVICE RESERVE ACCOUNT AND AUTHORIZING THE EXECUTION AND DELIVERY OF AGREEMENTS WITH THE PROVIDER THEREOF; PROVIDING COVENANTS FOR THE PROVIDER(S) OF SUCH BOND INSURANCE POLICY AND/OR RESERVE ACCOUNT INSURANCE POLICY; AUTHORIZING THE CITY MANAGER, THE CITY ATTORNEY AND CERTAIN OTHER OFFICIALS AND EMPLOYEES OF THE CITY TO TAKE ALL ACTIONS REQUIRED IN CONNECTION WITH THE ISSUANCE OF THE BONDS; AND PROVIDING FOR AN EFFECTIVE DATE. 11-00441 Summary Form.pdf 11-00441 Legislation.pdf 11-00441-Exhibit 1-SUB.pdf 11-00441-Submittal-City Manager's Memo -Revised Copy of Attachment to Supplement Item #1.pd Motion by Vice Chairman Carollo, seconded by Commissioner Dunn II, that this matter be ADOPTED WITH MODIFICATIONS PASSED by the following vote. Votes: Ayes: 5 - Commissioner(s) Gort, Sarnoff, Carollo, Suarez and Dunn II R-11-0228 Chair Gort: (INAUDIBLE) -- the afternoon session of the City ofMiami board meeting of May 26. I was request the first item of business, if we can hear what the finance -- Larry Spring: Commissioners, Larry Spring, chief financial officer. The item is a resolution of the City Commission authorizing the issuance of not to exceed $140 million in aggregate principal amount of special obligation non -ad valorem revenue refunding bonds in one or more series, from time to time, for the purpose of refunding the City's outstanding $50 million aggregate principal revenue note Serious 2010 used to finance the Port Tunnel Access Improvement project and the refinancing of certain outstanding loans from the Sunshine State Governmental Financing Commission in approximate amount of $68 million. The interest rate cap that the City's seeking with regards to this item is 7.5 percent interest. Based on our market runs, the expectation is that the interest will price in and around 5 and a half to 6 percent. The -- as stated earlier, this series is broken down into two series, the $68.5 million for the Sunshine State refunding and the 50 million for the Wells Fargo note. The -- there's a time critical piece of this. The Sunshine State note has to be refinanced and paid off by August 1. The Commission's liquidity provider is pulling out and they've given us a deadline to complete the refunding. With regards to the Wachovia/Wells Fargo note, the City has a number of additional steps that we need to conclude prior to that financing or that series being completed. In particular, having the City, the CRA (Community Redevelopment Agency), and Miami -Dade County approve an amendment to the CRA existing Omni CRA interlocal to include the provisions of the debt payment of -- yeah, the debt payment of this -- of the $50 million. Andl believe our attorney wanted to put something on the record with regards to the item itself. Robin Jones Jackson: Thank you. Robin Jackson, assistant City attorney. As the Commissioners know, we came and corrected the photocopy error with the package which had basically the documents in an incorrect order. So we put those back in -- you know, as you know, before your briefings, we put those back for you all. We're also doing this in the record for the Clerks. Additionally, there was a typo that was corrected on Item D, which is the disclosure dissemination agreement. The page number at the bottom saidE-1 instead ofD-1. That was corrected. And as you're aware also, all of the documents are drafts because what occurs in the timing of the market and the transaction, all of the things that are there, Exhibit A, which is the form of bond; Exhibit B, the bond purchase agreement; Exhibit C, the preliminary official statement; and Exhibit D, the disclosure dissemination agreement are all City ofMiami Page 3 Printed on 6/16/2011 City Commission Meeting Minutes May 26, 2011 documents that will be finalized upon sale and closing of the bond financing. So we wanted to put that in the record to assist the City Clerk with just showing that those are -- the correct order has been undertaken so that the public will have the correct order. Chair Gort: Okay. Vice Chair Carollo: Mr. Chairman. Ms. Jackson: Thank you. Vice Chair Carollo: Ms. Jackson, what about the language that we had spoken about that was, it's my understanding, changed or --? Ms. Jackson: As we understand, Commissioner, as we said, this is a draft document for both the bond purchase agreement, the form of bond, the preliminary official statement, and the disclosure dissemination agreement, and all of those things are still being negotiated and will continue to be negotiated until we have the final sale and closing and also when we -- you know, when we then have the closing of the bonds. Vice Chair Carollo: Right. But the only thing is that we're voting on this now -- Ms. Jackson: You're -- Vice Chair Carollo: -- and -- on the final statement, the OS (Official Statement). We're not going to vote on it or anything, so that's why, yes, I under -- Ms. Jackson: No, sir, you're not. Vice Chair Carollo: -- I understand this is a draft and you're still being negotiated and so forth, but the bottom line is we're approving this now on what we have. Ms. Jackson: You're approving a form and a draft and you're authorizing the City Manager legally to be your representative in consultation with bond counsel, disclosure counsel, the City Attorney, as well as financial advisor and the finance team so that all of the documents then, you know, including the different provisions you see there, are finalized. So it does not come back to Commission. Remember, logistically, you're authorizing the City Manager. Yes, sir. Chair Gort: While I have you there for the understanding of ourself and people that are sitting here and people that watching this, go through the process of the team that puts all those document together. I mean, what we approving as elected official is the amount, the cap of the amount, and the cap of interest rate, and anything can go under it. Now I think it's very important that everyone understands what makes up the team that put this documents together. I think the attorney should -- Ms. Jackson: Be glad to. We have actually a very extensive team. You have bond counsel, which will give an approving opinion regarding the actual bond and tax implications of the financing. You have a disclosure counsel that will give an opinion -- Chair Gort: The bond counsel works for the City ofMiami. Ms. Jackson: Yes, sir. Chair Gort: Represents the City ofMiami. City ofMiami Page 4 Printed on 6/16/2011 City Commission Meeting Minutes May 26, 2011 Ms. Jackson: Yes, sir, they do. Chair Gort: Okay. Ms. Jackson: Disclosure counsel works for the City ofMiami, okay. CityAttorney's office, of course, works for the City ofMiami. You also have a financial advisor that works for the City ofMiami. You have a finance team that's made up of the whole finance team of the City, with Mr. Spring, and he can tell you who all's involved with the team there. And they all work for the City ofMiami. Then (UNINTELLIGIBLE) negotiated with the underwriters and their counsel, and they assist the City in going to the market to be able to sell the bonds and to negotiate on the interest rate. But remember that the City's team are the bond counsel, disclosure counsel, all of your City staff and your financial advisor. Chair Gort: And the underwriter's counsel works very closely with you all and he checks the documents on behalf of the underwriters. Ms. Jackson: They do. Chair Gort: Okay. Disclosure counsel, can you explain what they do? Ms. Jackson: Disclosure counsel works with the City to make sure from the financial side and from the disclosure side that all of the information that would be necessary for the sale and preliminary official statement is there and then for the final official statement. Our disclosure counsel is here if you would like to ask her any questions. Chair Gort: Okay. Thank you. Ms. Jackson: Thank you. Chair Gort: Any further discussion? Questions. Vice Chair Carollo: Yes, Mr. Chairman. Chair Gort: Yes, sir. Vice Chair Carollo: As you all know, you know, it's quite difficult to review all these documents. There's a lot of numbers and so forth, and a lot of time we rely on management and that whole team that you're speaking about, some more than others. I myself have found, you know, a few errors that, you know, I want to mention, make sure that it is fixed by the time the official statement is out. But at the same time, I want to get your statement saying that you have reviewed, analyzed, and updated this POS (Preliminary Official Statement) to the best of your abilities to be as current as possible and as correct as possible. Mr. Spring: The statement I will give you, Mr. Chairman [sic], is that through preparation for this item, we have done that. However, even -- I know you've shared some of your comments with me already that we've -- we know we need to add, so we even continue to do iterations of the POS. Before we go to market with that item, the entire team will have concurred that the POS has been updated and includes all of the necessary and relevant information to be a proper disclosure document. Vice Chair Carollo: Okay. Chair Gort: Now, the -- just to bring you aware of it -- because sometimes I get involved in this type of events. A lot of times you get five, six permanent statement before you really create the City ofMiami Page 5 Printed on 6/16/2011 City Commission Meeting Minutes May 26, 2011 original statement, so it's very unusual to go through five or six preliminary official statement before you go into -- Mr. Spring: Right. Chair Gort: -- the original statements, so -- because all the lawyers -- and I'm not a lawyer, but we have two lawyers here. You know that -- and I've been in a lot of the discussion where you can sit there andl can see lawyers arguing for one verb or one sentence for hours. So you have the -- the attorney that represents the underwriters that wants to make sure that all the documentation that they have is correct because they have a responsibility. If they do something and it's not correct according to the documents, they have a problem. We have our own bond counselors and financial advisor, which I think is very important. And l just want to explain the process because I want people to understand what the process is. Any questions? Mr. Spring: If you will allow me -- Vice Chair Carollo: Mr. Chairman. Mr. Spring: -- to add, I was going to say, once we have the POS draft that we're going to go to market with, we will communicate that with the Commissioners and obviously we'll give you the final OS once it's completed, which will be -- Vice Chair Carollo: Thank you. Mr. Spring: -- after the transaction -- Vice Chair Carollo: Thank you. Mr. Spring: -- is priced. Vice Chair Carollo: And Mr. Chairman, if possible. There's two that, you know -- one I already mentioned, the $50 million Wachovia note that needs to be included. Also on page 24, it says audited. I think that's incorrect. It should say unaudited. On page 24, the table below compares actual audited revenues expenditures to budgeted amounts for fiscal year 2011. Mr. Spring: You're right. Vice Chair Carollo: We -- it should be unaudited. Mr. Spring: Unaudited. Vice Chair Carollo: And then the note and I think those are the two big ones that I saw. But again, you know, it's only one set of eyes. I count on the whole team to, you know, look this over and update it as much as possible. Mr. Spring: Okay. Vice Chair Carollo: Can I ask with regards to the Sunshine State loans? I have a few questions, if possible. I see here that six -- roughly $6 million went to Museum Park. However, I was under the impression that CRA was going to be paying for that, so could you elaborate a little bit about that, the CRA paid for it. If we -- and if they did, if we received those fundings, can it go to repayment of this loan, or where do we stand on that? Mr. Spring: The piece that was used for Museum Park was for the design, and that money was City ofMiami Page 6 Printed on 6/16/2011 City Commission Meeting Minutes May 26, 2011 reimbursed to the City from Omni as part of last year's budget -- or the current year's budget. It was part of that ten million four that the City received. I believe it was budgeted to offset one other one-time expenditures that we had in the current budget. So the Commission already appropriated that money. Vice Chair Carollo: But what was the amount, because I have here $6 million? Mr. Spring: It was -- that's how much was budgeted. It was about five million -- Chair Gort: Ten million is the total. Mr. Spring: Four point three million, from the CRA director. Vice Chair Carollo: I don't know if we're comparing apples to apples, but I'll yield. Mr. Spring. If you look at the schedule, Commissioner -- Vice Chair Carollo: Yes. Mr. Spring: -- you'll notice that it says 6,015,466 -- Vice Chair Carollo: Right. Mr. Spring: -- budgeted -- Vice Chair Carollo: Exactly. Mr. Spring: -- actual cost of 4.2 million. Vice Chair Carollo: Exactly. Mr. Spring: We got reimbursed the 4.2 million, so there's still a remaining 1.7 allocated to the project or that portion of the project that had not been incurred. It is committed so it's -- there's a purchase order outstanding, but the money has not yet been spent, so -- Vice Chair Carollo: And you're saying the CRA, through those $10 million, paid for this? Mr. Spring: They paid us the 4.2. They paid -- they reimbursed us what was -- had actually been spent already. Chair Gort: Been spent. Vice Chair Carollo: And those 4.2 was used for? Mr. Spring: The design of Museum Park. Vice Chair Carollo: The design cost $4.2 million? Mr. Spring: Well, actually, it's more than that, but I'll ask Ms. Bravo to give me an exact figure. Vice Chair Carollo: Jesus. Chair Gort: Welcome to government. City ofMiami Page 7 Printed on 6/16/2011 City Commission Meeting Minutes May 26, 2011 Mr. Spring: It's expected to be a $70 million park. Vice Chair Carollo: We're in the wrong industry. Forget attorneys and accountants and whatever. We need to be architects. Commissioner Sarnoff. Landscape architects. Chair Gort: Yes, ma'am. Alice Bravo (Director): Alice Bravo, Capital Improvements. Yes, the designer prepared basically 100 percent plans for the entire park, which is estimated to cost approximately $60 million so that went through survey, developing, drainage plans, all the different features, landscaping plan, et cetera, tree relocation plans, and that work is complete. Chair Gort: Ms. Bravo, let me ask you a question, and could you explain -- because -- to us sitting here and people watching and sitting up here the cost -- the actual cost -- because it's very hard for people to figure out $6 million for design. Could you go into the engineers, architects, what takes place, and why it cost $6 million? Ms. Bravo: Well, at the end of the day, for every component that you have in the park, you have probably ten different disciplines of plans for which you have to develop a set of plans, so our plans for this project is maybe two or three inches thick of full set plans. So first you survey the site, you evaluate it. They had an extensive public involvement process through which they developed the master plan for the project, so I don't know the break-out of that cost, but it was a significant effort over several years just developing the master plan. And then once they have that, they have to start final design, and that includes everything from electrical calculations for the lighting system, calculations for irrigation, calculations for the overland drainage on the site. In addition to that, you have to develop plans, cross -sections, quantities for something that's many acres. Chair Gort: I've also asked a question before of CIP and Building Department, why does it cost more for the government to do something than from the private sector? My understanding, the explanation that was given to me is the requirement that we have and insurance, bonus and -- could you go into that, please? Because people need to understand the differences between when you do it privately -- through a private sector and when you do it through government sector. Ms. Bravo: Yes. And once we've procured a contract and we enter with them, there are insurance requirements. They have to have general liability insurance, auto liability insurance; show the City as an additional insured. We agreed to indemnify them. For example, this -- the firm that prepared these 100 percent plans, they still bid on contract for a year without really actively working on the plans. They still have to maintain those insurance policies. And they're actually asking us what is the intent with the contract because if there's no work for them to do, they would terminate those policies. They only have those policies in place for us as a contract since their other clients are private sector clients. In the case of contractors, we have push-button construction contracts where some contractors have a bond in place and we haven't issued them any assignments, yet they're incurring a cost for carrying that bond. Chair Gort: Thank you. Ms. Bravo: Thank you. City ofMiami Page 8 Printed on 6/16/2011 City Commission Meeting Minutes May 26, 2011 Vice Chair Carollo: Mr. Chairman. Chair Gort: Yes, sir. Vice Chair Carollo: To add to the explanation or to further ask, they don't need these requirements in the private sector? Ms. Bravo: Generally, if one of us were to hire an architect to design our homes, you wouldn't ask them for a general liability insurance policy. Vice Chair Carollo: One thing is a home. What about these mega buildings? Government don't do these mega buildings. You mean to tell me, they don't need insurance to build these big buildings -- Ms. Bravo: That's my -- Vice Chair Carollo: -- skyscrapers and so forth? Ms. Bravo: My understanding is that as a client, a developer is not going to ask a design firm for a general liability policy to indemnin, that. That's my understanding. Vice Chair Carollo: I just -- I mean, I'll take you at your word. I just -- I'm seeing it -- it doesn't make -- it doesn't appear like it's common sense because if they design the building wrong and something happens and we have -- so there has to be some type of liability insurance. Ms. Bravo: And that's an errors and omission -- Chair Gort: Error and omission. Ms. Bravo: -- insurance. There's general liability insurance for -- if someone sues you because they claim that you harmed them. Then there's errors and omission insurance that does address the quality of their work so far as they're not negligent in performing them. A contractor, you -- in addition to a bond, a bond insures that the work will be completed by someone else. If you don't require that of the contractor, then the private client is assuming that risk or will reserve their rights to pursue that contractor in court. There's also builder's risk insurance in case the construction is damaged while it's in process due to a hurricane or something of that nature. Vice Chair Carollo: So what you're saying is that we require all that and the private sector does not? Ms. Bravo: Some are required by all, such as builder's risk. Some -- the general liability, those types of policies are required by government, public sector clients. Vice Chair Carollo: You know, you actually spoke very well and you gave some beautiful examples, but the bottom line is still, I say, $6 million for designs of a park? This isn't even the design of the Museum. This is for a park. Ms. Bravo: Yes. Vice Chair Carollo: I mean, $6 million for a park. I mean -- and again, you spoke very eloquently, you know. It was great. But we get down to the basic. Ms. Bravo: Right. City ofMiami Page 9 Printed on 6/16/2011 City Commission Meeting Minutes May 26, 2011 Vice Chair Carollo: Six million dollars for a park, never mind the museums. We're not even talking about the construction, you know, actual bricks and mortars. We're talking for a park. Ms. Bravo: And generally -- Commissioner Sarnoff. Well, the -- if you can -- can I interrupt? And I'm not here to defend the $6 million because I don't think that was an appropriate amount. But however, understand that there was an underground 300 parking garage, there was a restaurant design. There was some infrastructure in those plans, and those plans were, you know, ready to go. I'm not here to defend it, but it wasn't just a park with a sprinkler system and a hedge. Ms. Bravo: Right. We have elaborate landscaped areas, walkways, pathways, lighting, all types of different lighting elements. And at the end of the day, when you take the size of the park and the number of plan sheets that have to be developed and the number of different disciplines involved in developing the different aspects of the park, it adds up. Chair Gort: Okay. That's something that happened before us and -- Vice Chair Carollo: And Mr. -- Chair Gort: -- I'm sure, in the future, we're going to be looking a lot more closely to all of -- Vice Chair Carollo: Mr. Chairman, one -- Chair Gort: Yes. Vice Chair Carollo: -- more as far as these -- Chair Gort: Yes. Vice Chair Carollo: And this goes back to something that I and Commissioner Suarez spoke about just a little while ago. Information Technology, I definitely believe that is a need, but what we're paying and what we're receiving is two separate things. I'm seeing here -- first of all, what's land management system? Could you explain to me what land management system is? Derrick Arias (Assistant Director, Information Technology): When the Sunshine State loan was Chair Gort: Excuse me. Mr. Arias: -- originally -- Chair Gort: Excuse me. Mr. Arias: I'm sorry. Chair Gort: You are? Mr. Arias: Derrick Arias, IT (Information Technology) Department. Chair Gort: Thank you. You got to get used to that. City ofMiami Page 10 Printed on 6/16/2011 City Commission Meeting Minutes May 26, 2011 Mr. Arias: Yeah. Chair Gort: It'll take you a while, but you'll get used to it. Mr. Arias: When this loan was originally procured, the land management system was going to be the new application system for the Building Department, Public Works, and the CUs (Certificates of Use), BTRs (Business Tax Receipts), the licensing application. Vice Chair Carollo: And do you recall what's the amount, how many millions went to that? Mr. Arias: The amount that was -- the total amount allocated was $4 million. Commissioner Suarez: Can I ask a question? Vice Chair Carollo: Sure. Because -- Commissioner Suarez: Interrupt you. Vice Chair Carollo: -- I know where you're going with this. Commissioner Suarez: Well, then you go ahead and ask. No, because I don't want to interrupt your line of questioning here. Vice Chair Carollo: No. Commissioner Suarez: You're doing a very abled job of getting to the point. Vice Chair Carollo: Go ahead. I always say this is a team thing up here. Go ahead. Commissioner Suarez: My question is -- which I think I preempted his question, which is basically do we have a land management system right now in operation? Do we have a CU system right now in operation? And do we have a Building Department system in operation currently today? It should -- Mr. Arias: We have -- Commissioner Suarez: -- be a one -word answer, yes or no. Mr. Arias: -- part of those. We have the old systems. The new systems have not been completed. Commissioner Suarez: So the answer's no? Mr. Arias: The answer is no on the new systems. Commissioner Suarez: Okay. That's -- I think that's the point that we're trying to draw, which is that we spent $4 million and we don't have -- and -- sir, you just arrived, so it's certainly not your fault and we're not blaming you. But you know, that was kind of the point that we were trying to make earlier today, I think. Mr. Arias: That entire allocation hasn't been spent. Vice Chair Carollo: I know where you're going, Larry, but go ahead. I know where you're going with this. City ofMiami Page 11 Printed on 6/16/2011 City Commission Meeting Minutes May 26, 2011 Mr. Spring: Okay. Just -- Larry Spring. I just want to make one clarification. Derrick is going off the actual cost that's listed on the report. Vice Chair Carollo: Right. Mr. Spring: However, embedded in here -- andl don't know the exact number right now. The City -- the $7 million that we returned of the Sunshine State is also recorded in that actual cost column, so they haven't spent $4 million on this project as of right now today. Vice Chair Carollo: However, it's 65.28 percent completed, so that means there's still a ways to go and more expenditures. Mr. Spring: There are more expenditures, yes, correct. But I wanted to correct that, so I don't want you to say the wrong number on the record. Vice Chair Carollo: But we're still not done spending. Mr. Spring: No. Vice Chair Carollo: Right. And that's my point. And you know what, it gets to the point -- 2 million, 4 million, I mean, you know -- and something that think Commissioner Suarez has been pushing, do we have any of these applications able to be done online? Mr. Arias: The application that is being developed -- so let me just for clarification -- I mentioned how it was originally defined. What has happened is the focus has been on the Building Department application, so what we are currently working on and what is close to being complete is iBuild, which is the new permitting and licensing application for the Building Department. It will be an online application. It will allow Web payments once we complete it and put that application out there. And then we're also working separately, but that has nothing to do with this funding, the CU, BTR application. Vice Chair Carollo: Thank you. I mean -- and -- Chairman Gort, you mentioned, a lot of this was before our time, before any of us -- some of -- yeah -- these decisions that were made, whether to spend X'amount on this IT, or whatever usage, and so forth. But I think, you know, it just shows why some of us up here are frustrated and, you know, why we're trying to do the best that we can with, you know, decisions from the past. And again, we're just trying to move this City forward. And we want to make sure that anything that we can -- that's in our power right now to enhance what we have, make -- you know, simply put, get more bang for our buck, we're doing, so I'm just doing my due diligence in trying to, once again, get more bang for our buck. Chair Gort: Let me -- just before I go to you, Commissioner Suarez, and then I think the other Commissioners. I want to state it, that l feel very proud of this Commission. I think this Commission is asking the right questions and we sending out the right message. So I want you to understand, we question a lot because -- like I myself, we read this document that we have in front of us, we made some recommendation for staff and they made some changes according to the recommendations. My recommendations to you all is whatever you see, read through it like you all do and bring it up to staff. Commissioner Suarez. Commissioner Suarez: Thank you, Mr. Chairman. And I apologize, Mr. Arias; you're kind of dealing with the brunt of a frustration that's been building up. And just like we inherited a lot, you've also inherited a lot of things that you're going to have to, you know, deal with as time goes on, and we're going to help you because our objective here is to work together, as Vice City ofMiami Page 12 Printed on 6/16/2011 City Commission Meeting Minutes May 26, 2011 Chairman has said, you know, not to be antagonistic in any way, shape, or form. I have a lot -- a couple of questions that don't deal with your department so -- they deal with the bond issuance. I just want to clarify a couple of things on the record. I think the last time that we brought this as a discussion item, I think it was healthy to bring it as a discussion item because we wanted to do the process slowly and give the public an opportunity to have input on this item and make it -- you know, explain what was transpiring. I just want to clarify some things and ask a few questions. The first thing is that this entire transaction is as a result of the fact that we are being -- that our Sunshine State loan obligation is being called and also that our other loan obligation is coming to fruition that we're -- we would have to make a very large lump -sum payment in the following year, correct? Mr. Spring: Correct, exceptl would clam this point. The -- on the Sunshine State, we had always anticipated coming to do a refinancing closer to the anticipated maturity, which was -- I think it was 2016. However, because of the liquidity provider issue with the Pool, that had to be advanced. And with regards to the Wachovia, we went ahead and got the loan so that we can make our obligation to the State, stop accruing interest, and -- or their interest, rather, I should say. And now we're putting it where it had always intended to be, which was with the CRA as part of the TIF (Tax Increment Fund) financing. Commissioner Suarez: Andl remember we talked a lot about the Sunshine State loan in a variety of different times. We haven't borrowed much money on it since we've been elected. But we've talked about it on a couple of occasions and we've actually discussed the actual interest rate, which is a variable rate. And are you aware of any other transaction or any other vehicle by which we can borrow money at that same interest rate? Mr. Spring: I mean, there's a number of borrowing vehicles that we can look into working with our underwriting banks. I know the Pool also offers commercial paper product -- Commissioner Suarez: Right. Mr. Spring: -- as well. Its variables, you know, as well, but we'd have to look into the details. I mean, there are other vehicles that we could look into. Commissioner Suarez: I guess what I'm getting at is my understanding of the reason why the rate was so favorable in that instrument was because it was basically an instrument that was -- I'm sorry -- an amount that was lent to us by a governmental institution and that's why we had such incredibly favorable terms. Mr. Spring: That and the liquidity provider also, the very stable Dexia liquidity provider. Those letter of credits now are extremely difficult to come by now, and so the market has driven prices up. Commissioner Suarez: Right. Andl think that's what I'm getting at. I'm trying to let the public understand why we would be refinancing out of a debt where we were -- Mr. Spring: Correct. Commissioner Suarez: -- paying 1 percent -- Mr. Spring: Right. Commissioner Suarez: -- to a debt where we could be paying the market rate, which is -- Mr. Spring: Five and a half, six. City ofMiami Page 13 Printed on 6/16/2011 City Commission Meeting Minutes May 26, 2011 Commissioner Suarez: Right. And -- I mean, to most people that would seem like a bad decision. But the fact of the matter is it's a decision that, A, we have to make because the loan is being called; and B, there is no other equivalent debt instrument that we could get into that would, you know, give us that kind of a rate. I wish there was. I mean, I wish someone would lend, you know, money at that rate. That would be wonderful. But it simply doesn't exist, as far as I know. I guess the last question that had, just to clam the record, was we talked a little bit about the savings in the last -- Mr. Spring: Yes. Commissioner Suarez: -- when there was the discussion item. Andl think maybe there wasn't a clarification as to why there's going to be savings. Clearly, if the interest rate is increasing, you're paying more money -- the borrowing cost is higher, the cost of borrowing is higher, so that would imply that there isn't a savings. But the fact of the matter is the maturity horizon of the debt instrument is significantly longer and that's why even though the interest rate is a lot higher in one case, in the case of the Sunshine State loan piece, I think the other 50 million that we borrowed is basically at rate -- Mr. Spring: Correct. Commissioner Suarez: -- at market, right? Mr. Spring: Correct. Commissioner Suarez: More or less. So we're not going to be saving a substantial amount of money. But because of the landing horizon, we're actually going to be paying a lot less in debt service on an annual basis and we have some front -loaded savings on some of these instruments. Mr. Spring: That is correct. Commissioner Suarez: Right. Mr. Spring: Over the next five years, we're looking at $55 million in cash flow savings, which is beneficial to us from a couple of standpoints. One, I think the rating agencies will look favorably on the change. Also, I see it as an opportunity, but it will be a policy decision of this Commission that perhaps some of that savings goes back to replenish the City's reserve. Commissioner Suarez: I think that's a wise idea. Andl think we discussed how that money could be applied and to what extent it could help defray different issues -- Mr. Spring: Right. Commissioner Suarez: -- that we have, you know, ongoing. We have a potential deficit issue. We have -- Mr. Spring: Right. Commissioner Suarez: -- also a deficiency problem -- Mr. Spring: Right. Commissioner Suarez: -- with our reserves. City ofMiami Page 14 Printed on 6/16/2011 City Commission Meeting Minutes May 26, 2011 Mr. Spring: The reserves. Commissioner Suarez: So I just wanted to clam some of these issues for the record. I think that, you know, there may have been some misperceptions out there and maybe there was a lack of clarity on some of the questions that) asked in the last Commission meeting and) just wanted to make sure that) was crystal clear on these issues. Mr. Spring: I understood what you were saying, Commissioner. Chair Gort: Commissioner Sarnoff. Commissioner Sarnoff. Thank you, Mr. Chair. You know, I guess my questions are not relevant to the vote or in part actually are most relevant about the vote, which is I asked how did we spend this money, what did we spend this money on. Andl think you all got the same spreadsheets) got, and then you got subtotal spreadsheets. Andl thought it'd be worth visiting 'cause I hear the Vice Chair oftentimes -- well, frequent times get up and say I have no parks, I have no parks; perfectly valid thing to say. Vice Chair Carollo: I didn't want to go there this time, but I know what you're seeing, believe me. Commissioner Sarnoff. Well, I -- Vice Chair Carollo: I saw that. I just didn't want to go there again. Commissioner Sarnoff. I want to give somebody -- I want to give some historical background to you -- for you and to you and maybe explain how we got where we got and maybe show just how poorly I think District 2 has benefittedfrom the sunshine state loan, and if you would indulge me. The way this all started was in 2001 when they created the Homeland Security bond issue, and) don't know if Commissioner Gort were here then. But apparently they went around to all the Commissioners and they created line items on things they would like to see created in the City ofMiami. And in those line items, they took what is sophistically referred to as WAGs, WildAssed Guesses, as to what it would cost. Some people call that the napkin deal around here, and some people thought it was other things. And so in this $250 million debenture from the City ofMiami voted on by the taxpayers was a list of things that we're going to get done. As the list started to get done -- as you know, we were in probably the height of the building boom. It was fair to say from 2001 to 2004, very few projects actually got done for maybe competency reasons. I wasn't here. I don't know anybody that was sitting up here, would have been here. But as a matter of fact, you actually had to treat it sort of as an emergency because you had not spent your bond dollars within the requisite timeframe, and) think that was the creation of your CIP (Capital Improvements Program) Department. Having said all that, it became pretty obvious that the wild assed guess taken by the former Commissioners turned out to be either very much wrong or just that, a guess. So projects that had line items in the various plans were coming up extremely short, factoring change orders, factoring in building costs going up during the height of the building craze, it was very obvious $250 million was not going to be enough money to build all these projects. Then came something called the sunshine state fund, and that would appear to be a very good idea to enhance -- I guess the Vice Chair might call it enhancing your balance sheet by adding another 40 or $50 million to shortfalls that were being experienced throughout the City ofMiami on Commissioner projects. So that's where we find ourselves with approximately $42 million of projects that were paid for out of sunshine state. And we all received something up here called the sunshine state project summary as of May 11, 2011. Having looked at this as every, I think, Commissioner should do, I did, and) think there's nothing wrong with it. I just thought, wow, of the $42 million, how much was spent in City ofMiami Page 15 Printed on 6/16/2011 City Commission Meeting Minutes May 26, 2011 District 2. And as I looked andl looked andl looked, andl candidly, Mr. Vice Chair, took out the 6 million 'cause I know the CRA's paid 4.2 of that back, and they'll pay back the other part. I could find $2 million of $42 million. So I'm thinking to myself, that was a bad deal for us. Andl don't know how -- and by the way, I think to myself well, this certainly could be divided by five; could be 20 percent each sort of thing, so 18 percent was lost in District 2. I can recall when we did the street bonds money andl was very upset at this and I've said this probably never to this Commission, but I did say it to Pete Hernandez, who was the Manager at the time . He came up to each Commissioner and he said we're going to divide the street bond money by five. Sounds fair, sounds equitable, but the problem with that was almost 50 percent of all the streets in the City ofMiami exist in District 2, so that wasn't right. And of the 50 percent of the streets that exist in District 2, we had the most F fated streets. So I was getting for District 2, which includes downtown, which I think is the lifeline of the City ofMiami, we were politicizing street bond money so that what was happening was the streets that needed to be taken care of in the City ofMiami could not get their pro rata share. So in my opinion what you should have done is just done pro rata based on needs, a needs study, but it wasn't done that way. And now apparently the sunshine state loan money wasn't done even equitably because it's not even close. The best I can find is $2 million. And if I'm off maybe there's 3 million in here. So I looked up one other area called citywide park equipment. I don't know really what that means. So I did then -- and by the way, it's broken into two different categories. There's a B number of 30541, and then there's a category for a different one as well, and the City broke it down to Award 1464 and Award 1496. So I said to myself, I wonder if that was distributed equitably, fairly, across-the-board citywide. Andl looked into Award 1464 and that was to -- and by the way, the City graciously couldn't total that up for me so I took out my pocket calculator; I did so. So of $2, 448,979, I was able to find in District 2 allocations $250, 445, okay. That means that District 2 received 10.2 percent. Thinking to myself, I should be dividing by five, so pro rata, we should have gotten $489, 726. So I thought to myself, they must have made it up to us in Award 1496. Award 1496 was $1, 005, 734.56, and again, the City graciously didn't total it up for me, so I did so. Andl saw the total for District 2 was $111,974. And to and behold, we did a little better. We got 11.13 percent. Our pro rata should have been $201,147. Now I sit before you only able to find of $42 million $2 million of District 2 allocations. I sit before you of about $3.5 million, a little less than that, andl can only find a little over about $361, 000. Now I've got to tell you. I know that we all have a social responsibility. I understand that this district is the district that pretty much finances the City ofMiami, but it can't be all give, gentlemen. There's got to be a better distribution than this. There's got to be a more citywide thinking on this. You cannot take sunshine state loan money and so disparately injure District 2. And let me tell you how it comes out, it gets hurt. As a result of the overages, any time the City wants to do any kind of work in any of my parks, they come to me and they ask for quality of life money from my 2001 Homeland Security bond money. Otherwise, the project won't go. And do you know what I've done for the past five years? I was pretty judicious with that money, about $2.4 million. I was the only Commissioner to have that since 2007. And the reason I had it was because the City was spending everyone else's money on sunshine state loan money because they were getting their parks -- Look at it. It's not hard to figure out on this spreadsheet $42 million went to parks. Andl got to tell you, gentlemen, I don't mind disparity. I don't mind the fact that there are parts of this city that absolutely need improving more so than District 2. But you cannot take the quantity of dollars that are not being used in this district and then forcing upon a district Commissioner decision to use his quality of life money when other districts, not you sitting here, but your predecessors, spent that money. Andl feel very put upon and very foolish that the sunshine state loan spreadsheet was only created this year. We didn't know what it was being spent on. Andl come to you merely -- maybe like the Vice Chair does, making a comment about parks, making a comment about how things have been done. Andl will probably vote for this issue, but think the record should be very, very clear. The sunshine state money has not been spent judiciously, has not been spent carefully, and has not been spent equitably. Andl think it's wrong. And if the City has an explanation, I'm all ears. But if you borrow money to pay Peter, Peter's got to pay that money back and City ofMiami Page 16 Printed on 6/16/2011 City Commission Meeting Minutes May 26, 2011 we're going to pay that money back now. And unless I'm off, Mr. Spring, I don't see how District 2's been dealt with equitably at all. Mr. Spring: I -- Chair Gort: Yes, sir. Mr. Spring: The only thing could submit, Commissioners, is that those decisions on how those allocations went, from my perspective, were handled by the City Commission. The finance group simply went out -- we identified the funding and we raised the capital. The capital was done as you stated, to support the projects because the initial numbers that were used -- allocated to projects were not sufficient to fulfill the scopes of those projects. So I -- you know, I couldn't tell you, you know, when we were doing the financing that we said, oh, it'll go this way. When we did that financing we put that we would support every single project in the entire capital project listing. So it could have been allocated a number of ways. And you know, it was a decision that was made by the, you know, former Commission so -- Commissioner Sarnoff. And the only reason I brought up the street bonds was because I brought that issue up back then. Mr. Spring: Right. Commissioner Sarnoff. Andl thinkyou were here for it. Mr. Spring: Right. Commissioner Sarnoff. Andl said all you're doing is politicizing -- really, I call it transportation money, which is the street bond money, which is that -- I thinkyou said is a combination of a number of different -- Mr. Spring: Correct. Commissioner Sarnoff. -- funding sources. Mr. Spring: Revenue -- pledge revenue sources. And even with regard to that, the -- I know there was a -- unfortunately, not the -- it didn't pan out this way for the entire issuance, but the pledge of the parking surcharge, the predominance of it is collected in District 2, so that prorated amount had to go to District 2 with regards to the bond proceeds. With regards to the other two revenue sources that supported -- they're, you know, citywide sources, so you know, the street bond planned out that way. So those are the only two, I guess, legal, you know, bifurcation or nuances that I could put on the record today that would have, you know, supported District 2 a little bit more than the other districts. Commissioner Sarnoff. All you're saying is that certain money is earmarked to remain -- Mr. Spring: Right. Commissioner Sarnoff. -- within the impacted zone. Mr. Spring: Correct. Commissioner Sarnoff. And other monies not earmarked to remain within the impacted zone or the impacted zone is considered a citywide. City ofMiami Page 17 Printed on 6/16/2011 City Commission Meeting Minutes May 26, 2011 Mr. Spring: Is citywide, right. Commissioner Sarnoff.. All right. Thank you, Mr. Chair. Chair Gort: Okay. My question is what we're doing is we extending this debt for an additional 15 years. The reason we're doing so because we didn't have the funds to pay the $50 million that will come up because of the letter of credit and we will have to pay it off. Mr. Spring: That is correct. Or I should say the CRA. Chair Gort: My question is, we doing this at the time because of the -- we're sort of in a recession and we don't have the funds to pay the $50 million. That's why we have to refinance, like many people have done with the mortgages at their home. Now my question is -- and hopefully, God willing, we'll be -- have better times with the next years coming up. Are we going to structure this where we can have (UNINTELLIGIBLE) and in case in the future we're going to be able to call those bonds and pay it off before the 15 years? 'Cause we'll be saving money and interest in the long run. Edward Marquez: Right now the current (UNINTELLIGIBLE) is the standard ten-year call. Basically, you cannot call the bonds in the first ten years, but you can definitely accumulate the money for that purpose -- Chair Gort: Right. Mr. Marquez: -- and then at the ten-year call date, you can redeem as many bonds as you have cash on hand. Chair Gort: But my understanding, at the same time, there's some structures have been called on five years. Mr. Marquez: We can definitely look at the -- those aspects in the marketplace that -- Chair Gort: I would like for you to look at it and see the -- if there's any benefits to it or not. Mr. Marquez: My name's Edward Marquez -- Chair Gort: Yeah, I'm sorry. I forgot to ask you. Oh, okay. Mr. Marquez: -- financial advisor. Chair Gort: Former City Manager. I would like for you to look at it. And also, I understand you're looking at the insurance to see if we can bring down the interest also. Mr. Marquez: We will be contacting the insurance company tomorrow and sending them out the current package that's before you and start those discussions. Chair Gort: Okay. Thank you. Any other question? Any further discussion? Just to add a little bit. First time I ever got elected was citywide. I was in charge of creating the districts. I personally think it was a mistake, but the people wanted it, so we had to do it. Whenever I go to the neighborhoods andl talk to the neighborhoods [sic] and they ask me about the downtown Brickell, and the Omni area, I tell them the importance of that area in paying a lot of the taxes revenue that we have. But at the same time, when I go to Brickell and talk to the downtown people in Brickell, I let them know the importance of maintaining the neighborhoods 'cause if we don't maintain the neighborhoods, everything goes down. So it's -- andl want you to City ofMiami Page 18 Printed on 6/16/2011 City Commission Meeting Minutes May 26, 2011 ADJOURNMENT understand this -- and l feel proud of this Commission, as stated before, 'cause yes, we look at the districts, but also we look at the City as a whole and that's the one thing -- and it's good, Commissioner Sarnoff, that you bring all this up because I think it's very important people understand what we're dealing with and what we're working and what we're trying to do. Thank you. Any other questions? Vice Chair Carollo: No. The only thing want to add real quick, ifI may, Mr. Chairman -- and it's on a side note, that -- and yes, you're correct, Commissioner Sarnoff. You've seen me up here quite a bit mention as far as fairity [sic] within the districts and so -- especially about parks. And I'll be honest with you, I didn't even bother to add up what District 3 got. I just -- I've done it too many times already. I knew where we were going to be, so I didn't bother doing that. However, I do want to bring up that the next thing you're going to hear me mention more and more is the actual cost of projects. I think we're overpaying left and right. You know, I see some of this -- I see what we've got for our money, and to be honest with you, I think we're getting ripped off left and right. Andl don't mean that, you know, criminally or so forth. I'm not saying it that way. I'm just saying we're just overpaying, you know, plain and simply [sic]. And that's something that in the near future you're going to see me bringing it back up here more and more again. I think you all have noticed my capital plan for the next five years still hasn't been approved because -- well, let me not even get into details, but that's something that, yes, you're going to hear me bringing up more and more. Thank you. Chair Gort: Well, Commissioner, that's why this morning when we requested the RFP, we're not going to print them out. We're going to tell -- we told the people we want this service, how much you're willing to charge us for it, and that's the way to go. Okay, any further discussion? Do I have a motion? Vice Chair Carollo: So move. Commissioner Dunn: Second. Chair Gort: It's been moved by Cochairman Carollo, second by Commissioner Dunn. Any further discussion? Being none, calling the question, state it by saying iiye. " The Commission (Collectively): Aye. Mr. Spring: Thank you. Chair Gort: Thank you. Priscilla A. Thompson (City Clerk): Chair, I'm sorry. I just want to make sure that the record shows with the modification so stated on the record, dah, dah, dah, dah, dah. Thank you. Chair Gort: Yes. Mr. Spring: That's correct Chair Gort: Thank you. Mr. Spring: As modified. The meeting adjourned at 4: 59 p.m. City ofMiami Page 19 Printed on 6/16/2011